FBI reports that Health care fraud ranks among the highest priority investigations within the FBI's white collar crime unit, behind only public corrup

FBI releases annual healthcare fraud statistics and information
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Editor: Mike Bothwell
Profession: Qui Tam Attorney


May 28, 2008

By Julie Keeton Bracker

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The FBI recently published its annual Financial Crimes Report to the Public for the Fiscal Year 2007, showing that health care fraud is of continued concern.

The mission of the Financial Crimes Section (FCS) of the FBI is to oversee the investigation of financial fraud and to facilitate the forfeiture of assets from those engaging in federal crimes. The FCS is divided into three units: the Economic Crimes Unit - I, Economic Crimes Unit - II (formerly Financial Institution Fraud and Asset Forfeiture/Money Laundering Units), and the Health Care Fraud Unit. The report, which is published annually, provides an overview of each of these sections showing statistical accomplishments and examples of the identified priority crime problems.

The Healthcare Fraud Unit estimates that fraudulent billing accounts for between 3% and 10% of all healthcare expenditures nationwise. The Centers for Medicare and Medicaid Services (CMS) estimates $2.26 trillion was spent on healthcare in fiscal year 2007, leading to the conclusion that as much as $226 billion per year is fraudulently billed over the course of the year.

The FBI identified the most common types of healthcare fraud as: (1) billing for services not rendered; (2) upcoding (charging a higher value for services than is appropriate); (3) duplicate claims; (4) unbundling; (5) excessive services; (6) medically unnecessary services; and (7) kickbacks. Other areas of concern include durable medical equipment, hospital fraud, physician fraud, home health agencies, beneficiary-sharing, chiropractic, pain management and associated drug diversion, physical therapists, prescription drugs, multi-disciplinary fraud, and identity theft which involve physician identifiers used to fraudulently bill government and private insurance programs.

The report identified two trends for the 2007 fiscal year: an increased willingness to profit at the expense of the patient, and evolving schemes relating to new technologies. The FBI reported that investigations in several of its offices are focusing on subjects who conduct unnecessary surgeries, prescribe dangerous drugs without medical necessity, and engage in abusive or sub-standard care practices. Examples of the increasingly technical schemes being purpetrated involve medical data theft and other fraud schemes facilitated through the use of computers. The report also mentions increasing concerns regarding The Medicare Prescription Drug Program (Part D), which was implemented in 2006 and so is relatively new.

The FBI reports that Health care fraud ranks among the highest priority investigations within the FBI's white collar crime unit, behind only public corruption and corporate fraud. As a result there are a number of national initiatives, including the Internet Pharmacy Fraud Initiative, the Auto Accident Insurance Fraud Initiative, and the Outpatient Surgery Center Initiative. The overall goal of the Internet Pharmacy Fraud Initiative is to identify fraudulent Internet pharmacies and target physicians who are willing to write prescriptions outside of the doctor/patient relationship. This group also heads investigations into the sale of counterfeit and diverted pharmaceuticals on the Internet. The Auto Accident Insurance Fraud Initiative was launched in 2005 in response to increasingly sophisticated staged accident schemes, which present a danger on the road as well as the economic harm of the fraud (which includes the rising cost of private insurance).

Overall, the FBI reported that Fiscal Year 2007 saw it investigating 2,493 cases, resulting in 839 indictments and 635 convictions of health care fraud criminals, with some cases still pending. In the area of health care fraud the report states that FBI investigations resulted in $1.12 billion in restitutions, $4.4 million in recoveries, $34 million in fines, and 308 seizures valued at $61.2 million.

In conclusion, the FBI offered the following tips to protect yourself against Health Care Fraud:

• Protect your health insurance information card like a credit card.
• Beware of free services--is it too good to be true?
• Review your medical bills, such as your "explanation of bill," after receiving healthcare services. Check to ensure the dates and services are correct to ensure you get what you paid for.
• If you suspect Health Care Fraud, call 1-877-327-2583. For more information,
visit the web site at http://www.bcbs.com/antifraud.